President Muhammadu Buhari has said Nigeria’s new digital currency, eNaira, will increase the country’s Gross Domestic Product by $29 billion over the next 10 years.
The President said this on Monday at the unveiling of eNaira at the State House.
According to the President, the launch of eNaira makes Nigeria the first country in Africa and one of the first few countries globally to introduce a digital currency.
The new payment system, which took the Central Bank of Nigeria (CBN) four years to roll out, is expected to drive financial inclusion, serve as a backbone for electronic payment in Nigeria and also enable the movement of more people from the informal to the formal sector, hence scaling up the tax base of the country.
President Buhari also expects it to enable the government send direct payments to citizens eligible for specific welfare programmes as well as foster cross-border trade, a statement signed by presidential spokesperson Femi Adesina said.
”Let me note that aside from the global trend to create Digital Currencies, we believe that there are Nigeria-specific benefits that cut across different sectors of, and concerns of the economy,” the President noted.
”The use of CBDCs (Central Bank Digital Currencies) can help move many more people and businesses from the informal into the formal sector, thereby increasing the tax base of the country.”
The President also commended the Governor of the Central Bank, Godwin Emefiele, his deputies and the entire team of staff who worked tirelessly to make the launch of Africa’s first digital currency a reality.
”Work intensified over the past several months with several brainstorming exercises, deployment of technical partners and advisers, collaboration with the Ministries of Communication and Digital Economy and its sister agencies like the Nigerian Communications Commission (NCC), integration of banking software across the country and painstaking tests to ensure the robustness, safety and scalability of the CBDC System, ” he said.
The President also used the occasion of the unveiling of the eNaira to explain why he approved the use of the digital currency.
“In recent times, the use of physical cash in conducting business and making payments has been on the decline. This trend has been exacerbated by the onset of the COVID-19 pandemic and the resurgence of a new Digital Economy,” he said.
”Alongside these developments, businesses, households, and other economic agents have sought for new means of making payments in the new circumstances.
”The absence of a swift and effective solution to these requirements, as well as fears that Central Banks’ actions sometimes lead to hyperinflation created the space for non-government entities to establish new forms of ‘private currencies’ that seemed to have gained popularity and acceptance across the world, including here in Nigeria.
“In response to these developments, an overwhelming majority of Central Banks across the world have started to consider issuing digital currencies in order to cater for businesses and households seeking faster, safer, easier and cheaper means of payments.
”A handful of countries including China, Bahamas, and Cambodia have already issued their own CBDCs.
”A 2021 survey of Central Banks around the world by the Bank for International Settlements (BIS) found that almost 90 per cent are actively researching the potential for CBDCs, 60 percent were experimenting with the technology and 14 per cent were deploying pilot projects.
”Needless to add, close monitoring and close supervision will be necessary in the early stages of implementation to study the effect of eNaira on the economy as a whole.
”It is on the basis of this that the Central Bank of Nigeria (CBN) sought and received my approval to explore issuing Nigeria’s own Central Bank Digital Currency, named the eNaira.”